FAME II Scheme: Complete Guide to India’s Electric Vehicle Policy
The FAME II Scheme (Faster
Adoption and Manufacturing of Electric Vehicles in India) is one of India’s
most significant initiatives to promote electric mobility and reduce dependence
on fossil fuels. The scheme encourages the adoption of electric vehicles
through financial incentives, charging infrastructure development, and support
for domestic manufacturing.
The Government of India launched this
scheme to accelerate the transition towards clean transportation while reducing
air pollution and greenhouse gas emissions.
What
is the FAME II Scheme?
The FAME II Scheme is the second phase of the Faster
Adoption and Manufacturing of Electric Vehicles (FAME India) programme. It was
approved by the Cabinet Committee on Economic Affairs (CCEA) on 28 February
2019.
The scheme focuses on:
·
Promoting
electric vehicles
·
Supporting
EV manufacturing
·
Developing
charging infrastructure
·
Reducing
fuel imports
·
Encouraging
sustainable transportation
Duration
of FAME II Scheme
·
Launch Year: 2019
·
Duration: 5 Years
·
Total Budget Allocation: ₹10,000 Crore
· Nodal Agencies: Ministry of Heavy Industries (MHI)
and Bureau of Energy Efficiency (BEE)
Objectives of the FAME II Scheme
The major objectives include:
·
Encourage
faster adoption of electric vehicles.
·
Strengthen
India’s EV manufacturing ecosystem.
·
Reduce
dependence on imported crude oil.
·
Lower
greenhouse gas emissions.
·
Improve
urban air quality.
·
Develop
nationwide EV charging infrastructure.
·
Generate
employment in the clean energy sector.
Strategic
Goals of FAME II
The government has set ambitious goals under the scheme:
·
Achieve
30% electric vehicle penetration by 2030.
·
Increase
investment in EV manufacturing and research.
·
Electrify
public transport, including buses and three-wheelers.
·
Promote
indigenous manufacturing through localization.
·
Position
India as a global EV manufacturing hub.
Vehicle
Deployment Targets
The FAME II Scheme supports large-scale deployment of
electric vehicles across multiple categories.
|
Vehicle Category |
Target |
|
Electric Buses |
7,090 |
|
Electric Three-Wheelers |
5,00,000 |
|
Electric Four-Wheelers |
35,000 |
|
Electric Two-Wheelers |
10,00,000 |
|
Total Vehicles |
Approximately 15.4 lakh |
Charging Infrastructure Targets
To support EV adoption, the scheme includes extensive
charging infrastructure development.
Key targets include:
·
Around
2,700 public charging stations
·
Charging
station every 3 km in major cities
·
Charging
station every 25 km on highways
·
Fast-charging
corridors on major expressways
·
Smart
grid-connected charging stations
Financial Allocation under FAME II
The ₹10,000 crore budget is distributed as follows:
|
Category |
Allocation |
|
Demand Incentives |
₹8,596 Crore |
|
Charging Infrastructure |
₹1,000 Crore |
|
Administration & Capacity
Building |
Remaining Budget |
FAME II Incentive Structure
Eligible electric vehicle buyers receive upfront subsidies
based on battery capacity.
Electric Two-Wheelers (e-2W)
·
₹15,000
per kWh
·
Maximum
subsidy: ₹40,000
·
Minimum
40% localization required
Electric Three-Wheelers (e-3W)
·
₹10,000
per kWh
·
Maximum
subsidy: ₹50,000
·
Commercial
vehicles only
Electric Four-Wheelers (e-4W)
·
₹10,000
per kWh
·
Maximum
subsidy: ₹1.5 lakh
·
Commercial
and fleet vehicles only
Electric Buses
·
Up
to ₹50 lakh subsidy per bus
·
Applicable
for government procurement
Localization
Requirements
The scheme encourages domestic manufacturing.
Major localization requirements include:
·
Motors
·
Motor
Controllers
·
On-board
Chargers
·
Battery
Packs
·
Locally
manufactured EV components
Vehicles failing to meet localization norms are not eligible
for incentives.
Additional Benefits of FAME II Scheme
The policy also offers several
additional benefits:
·
GST
on EVs reduced from 12% to 5%
·
GST
on EV chargers reduced to 5%
·
Income
tax deduction up to ₹1.5 lakh under Section 80EEB
·
Road
tax exemption in many states
·
Priority
procurement of EVs by government departments
·
Financial
support for charging infrastructure
Expected
Impact of FAME II
The scheme is expected to create significant environmental
and economic benefits.
Fuel Savings
Approximately 9.5 billion litres
of fuel savings.
Reduction in Carbon Emissions
Around 2.5 crore tonnes of CO2
emissions expected to be reduced.
Employment
Generation
Approximately 10 lakh direct and
indirect jobs.
Foreign
Exchange Savings
Reduction in crude oil imports
leading to substantial foreign exchange savings.
Industry
Growth
Private investment of over ₹50,000
crore expected in India’s EV ecosystem.
Advantages of the FAME II Scheme
·
Faster
EV adoption
·
Cleaner
environment
·
Lower
fuel imports
·
Reduced
pollution
·
Increased
employment
·
Improved
charging infrastructure
·
Growth
of domestic EV manufacturing
Frequently Asked Questions (FAQs)
What is the full form of FAME II?
FAME stands for Faster Adoption and Manufacturing of Electric Vehicles
in India.
Who launched the FAME II Scheme?
The Government of India launched the FAME II Scheme under the Ministry of
Heavy Industries.
What is the budget of the FAME II Scheme?
The total financial outlay is ₹10,000 crore.
Who can receive FAME II incentives?
Eligible buyers of approved electric two-wheelers, three-wheelers,
four-wheelers, and electric buses that satisfy localization requirements.
What is the main objective of the FAME II Scheme?
The primary objective is to accelerate electric vehicle
adoption while promoting clean transportation and domestic EV manufacturing.
Conclusion
The
FAME II Scheme represents a major milestone in India’s transition toward
sustainable transportation. Through financial incentives, charging
infrastructure, localization requirements, and manufacturing support, the
scheme aims to accelerate EV adoption across the country. As India moves toward
its clean energy goals, FAME II continues to play a vital role in reducing
emissions, creating employment, and building a strong electric mobility
ecosystem.
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